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T-Mobile and Sprint are merging for $26.5 billion: Here are the details

The rumors and speculation swirling for years are fomenting into a dust cloud of money. T-Mobile and Sprint, the third and fourth-largest carriers in the U.S., respectively, are poised to form a single entity in a $26.5 billion merger that would put the united company in a close third position behind AT&T with just over 70 million postpaid subscribers.

The companies announced the deal mid-day Sunday with a slick webpage called All for 5G, highlighting the ways in which the merged corporation will focus on next-generation wireless technologies more effectively against the competition.

Should the deal be approved by U.S. regulators — a tall order in an environment that has discouraged M&A between intra-industry entities — the New T-Mobile, as the companies are referring to it — T-Mobile's parent company, Germany's Deutsche Telekom, would own a 42% stake and seat nine board members, while Sprint's parent Softbank would have a 27% stake and four board members.

According to Bloomberg, which broke the story, SoftBank CEO Masayoshi Son will have a seat on the board.

On its merger marketing page, Sprint and T-Mobile promise that the New T-Mobile will keep prices low, offer outstanding service, and provide more competition, with "a MAJOR expansion of competition into rural markets and for businesses of all sizes!" Critics point to markets like Canada where just three well-entrenched wireless carriers have less reason to compete, forcing prices up and suppressing consumer choice.

According to a press release co-issued by the companies, the combined company will have a $146 billion market capitalization, with Sprint's $59 billion number based on the $6.62 closing share price as of Friday, April 27. Officially, the new company will be called T-Mobile —the Sprint brand will disappear — and will have "expected run rate cost synergies of $6+ billion" compared to the two companies operating on their own.

The combined company will have lower costs, greater economies of scale, and the resources to provide U.S. consumers and businesses with lower prices, better quality, unmatched value, and greater competition. The New T-Mobile will employ more people than both companies separately and create thousands of new American jobs.

Current T-Mobile CEO, John Legere, will remain chief executive of the new company, while current T-Mobile COO, Mike Sievert, will retain that position at the New T-Mobile while also acting as President of the combined entity. Immediately following the merger, the New T-Mobile will hire thousands of new employees to fill retail, call center, and network infrastructure roles, according to the executive team, with investments of $40 billion in the combined network. While Verizon and AT&T will each still hold considerably more spectrum than even the combined Sprint-Tmo, Sprint's cache of unused 2.5GHz spectrum will be critical to migrating its customers to T-Mobile's LTE network, and will allow both companies to deploy low-band 5G more easily when the opportunity arises in 2019 and beyond.

T-Mobile and Sprint believe that the merger is perfectly timed, since cable companies like Comcast and Charter are poised to enter the wireless market, either as MVNOs or, later, as infrastructure owners of their own networks. While that hypothesis has yet to be proven, Sprint and T-Mobile believe that there is more competition in the market today than ever before, and the combined entity will be able to compete better on the network and content side.

At the same time, with the recent end of Net Neutrality in the U.S., both companies believe that they are in a good position to eke out as much profit per consumer as possible with a diverse selection of plans that may be able to take advantage of the availability of slow and fast lanes that weren't possible during the previous administration.

According to the companies, all of 54.6 million Sprint's customers will be migrated to T-Mobile's network within three years, and over 20 million Sprint customers already have phones that are compatible with T-Mobile's.

32 Comments
  • Canada is complaining but Sprint and T-Mobile both are not competing with AT&T or Verizon at all. Their coverage tends to be weaker and this they’re an afterthought for a majority of North America customers. This can help the two companies do better and still be aggressive against the bigger competition. Good for them, bring it on!
  • "Not competing with Verizon or AT&T at all" I don't think you have been paying attention to T-Mobile 's growth and trajectory over the past 4-5 years. This has to scare the hell out of AT&T and Verizon with the combined spectrum and coverage. And I suspect they will fight this merger tooth and nail.
  • You really haven't checked out a recent TMO coverage map, have you? TMO has been going after Verizon and expanding their network accordingly.
  • They should keep the price like JIO in India. Then they could easily compete big players like AT&T and Verizon.
  • Whoa whoa whoa... How is this even legal.
  • The senate will make it legal. In all seriousness, how is it not legal?
  • It's a step towards monopolozation.
  • They'll still be in third place. How is that a step towards monopolization.
  • I'm not sure you understand monopolies. Both AT&T and Verizon will still be larger than New TMO.
  • The Senate really has nothing to do with this. It's up to DOJ.
  • Watch the video
  • Perhaps it's right in front of me and I am missing it but with Sprint being CDMA (right?) and T-Mo being GSM, are folks from the Sprint side of this with carrier locked phones going to have to exit that handset to use the eventual-merged network?
  • The last paragraph of the article states:
    "According to the companies, all of 54.6 million Sprint's customers will be migrated to T-Mobile's network within three years, and over 20 million Sprint customers already have phones that are compatible with T-Mobile's."
  • I read that and struggled with the intent of the statement. Does that refer to switching equipment in towers over or switching customers radios out. Since the latter doesn't seem possible, I assume that's the former and they are counting on attrition to convert the handsets. At three years, that makes sense for most. But curious how that works for the edge-case folks that don't cycle through phones on the same interval that Sprint does.
  • Usually most devices have all the bands built into the chipset and just need to be enabled
  • Sprints CDMA 2G/3G will be gone by end of 2021 at the latest so people would have to get new phones regardless if the 2 companies merge or not same with T-Mobile tho i actually read with them they wanted to sunset 2G/3G (GSM) by end of 2019 so T-Mobile customers who still have 2G phones would have to get a new phone and all customers would have to get a new phone if they want to get 5G NR eventually
  • I'm so, so, so, happy T-Mo will be the primary company! That way I can still get my deals for being with the company for 18 years! I get much respect from the customer service people when they've notice I've been with them for like for ever!
  • w
  • What on earth does this have to do with Microsoft???
  • If you notice they post certain storys across all of their sites, android central, windows central, etc....
  • Some windows computers use LTE. Windows phones used cell service
  • "both companies believe that they are in a good position to eke out as much profit per consumer as possible" for the customer or for the company?
  • They are a for profit company not sure what you are complaining about.
  • I thought Sprint was CDMA and T-Mobile was GSM. Or does that not matter anymore? Or are they going to go all GSM since they want to call it New T-Mobile?
  • CDMA & GSM is 2G/3G and by 2021 at the latest ALL 2G/3G networks will be gone. AT&T's 2G is already gone and their 3G will go offline soon too. So to answer your questions nope it really doesn't matter anymore & no they won't be going to GSM they will be converting CDMA/GSM to 4G LTE (which they both already are) and 5G NR (New Radio) eventually
  • GSM or CDMA Explained more a bit: GSM is the only way to achieve 4G LTE and above. CDMA stops at 3g. Phones with SIM Cards are really using GSM technology. It is how newer (SIM equipped) Sprint and Verizon phones achieve LTE. When you are out of LTE coverage on Sprint or Verizon the phone drops down to CDMA. It's much easier to swap phones on GSM networks, because GSM carriers put customer information on a removable SIM card. Take the card out, put it in a different phone, and the new phone now has your number. What's more, to be considered GSM, a carrier must accept any GSM-compliant phone. So the GSM carriers don't have total control of the phone you're using.
    That's not the case with CDMA. In the US, CDMA carriers use network-based white lists to verify their subscribers. That means you can only switch phones with your carrier's permission, and a carrier doesn't have to accept any particular phone onto its network. It could, but typically, US carriers choose not to. So, older Sprint phones that are only CDMA will have to be Trashed pretty soon.
  • 4G CDMA was WiMAX, Sprint still has some WiMAX network they were building with Clearwire until Verizon committed to LTE forcing Sprint to commit to LTE as well. While generally CDMA carriers upgraded a specific path, and GSM carriers upgraded a different path, there wasn't a definitive path for CDMA like there was for GSM since GSM is a consortium and a standard. CDMA actually has a Sim standard but it isn't used. GSM as a technology isn't actually used much anymore as it is a 2G standard. 3G GSM was actually CDMA based (Wide Band CDMA) it used 5mhz carriers versus the 2.5 MHz carriers claiming it was more efficient but since it was larger it was harder to deploy and made upgrades slower versus CDMA to EVDO. LTE and WiMAX were mainly branding differences with very little technical difference both Based on OFDM (Orthogonal Frequency Duplexing) the same tech in WiFi and BlueTooth.
  • AT&T had two 2G networks, They had TDMA and GSM. The TDMA network was shutdown was shutdown a long, long time ago, the GSM just got shutdown in December of 2016.
  • About time. Verizon and att are getting too big.
  • Does anyone actually know how and when this will affect actual customers of either carrier? For instance, I am on T-Mobile which has piss poor coverage in my area. Will I eventually have access to Sprint towers in order to have a signal when I leave home?
  • it'll take 3 years for the companies to fully merge and yes you will eventually have access to Sprint towers because the spectrum from both companies will be combined for example if you have say 10+10 b2 (1900Mhz) on T-Mobile and Sprint has 10+10 on b25 (also 1900Mhz) you will now have a 20+20 network but how many towers and where depends I did read an article awhile back tho remember this was before the whole merger speculations started up again that T-Mobile had planned to shut down 30% of Sprints towers had they agreed to merge. Personally I don't think they should shut them down because of the way 5G is supposed to be built but if they can manage it I say more power to them I just hope they don't shut down towers in my area LOL T-Mobile only has 1 tower but supposedly sprint has 4 which could get coverage as good as Verizon here and might even make 5G easier than what it would be under just T-Mobile.
  • While I don't like them letting T-Mobile and Sprint Merge, it wouldn't be fair to deny them when they let AT&T and Verizon get so big. If they deny T-Mobile and Sprint, they need to break up AT&T and Verizon. They should have never let Verizon acquire so much band width. AT&T just bought up Cricket a few years ago.